Saturday, 22 August 2015

Global bear market - US, European, Chinese, Australian and Japanese stock indexes charted

A global decline in stocks is just beginning. I want to highlight that message for my readers in case it got lost among the charts of 11 different globally traded markets that I published earlier today.

This post shows charts of US, European, Chinese, Australian and Japanese stock indexes. The near term trend has turned down for all those markets, and they are all at junctures where the larger degree trend could also have turned down. My reading of the charts is that they will all trend toward much lower levels in coming months. There will be fierce rallies within those down trends, perhaps a rally starting as soon as Monday, but lower levels should follow. All charts in this post include all sessions trade through to the end of the week.

The bearish case for the US is presented below on a monthly chart of the S&P 500, showing a bearish false upside break from the trend channel formed from 2009's low. Such false breaks are a classic indicator of trend reversal. Today's full post for the S&P 500 is here, which shows several other charts.



The bearish case for Europe is presented below on a monthly chart of the EURO STOXX 50 index. This market also shows a bearish false upside break, a sign of trend reversal. This market is clearly weaker than the S&P 500, as it is still far below its 2007 high and even further below its 2000 high. Today's full post for the EURO STOXX is here, which shows several other charts.



The bearish case for China is presented below on a weekly chart of the Hang Seng index. Why do I show the Hang Seng and not the Shanghai Composite? I'll answer that with a question. Do you trust ANY numbers coming out of mainland China? Today's full post for the Hang Seng is here, which shows several other charts, one illustrating a forecast 50%+ decline.



The bearish case for Australia is presented below on a weekly chart of the ASX 200, which shows it slicing through several major supports, with another line nearby that will likely be tested soon. This market is clearly weaker than the S&P 500, as it is still far below its 2007 high (not shown). Today's full post for the ASX 200 is here, which shows several other charts, one illustrating a forecast 50% decline.



The final chart is a weekly for the Japanese Nikkei. The Nikkei is not yet in a confirmed decline at this timeframe, but a move below last week's low would break both major trend line supports illustrated below. From a longer term point of view, this market is weaker than all the others I've shown tonight, as it has been making fresh lows for several decades. On long term charts there is as yet no evidence of a lasting low. Today's full post for the Nikkei is here, which shows several other charts.





ASX 200 slices through multiple supports, below 5000 will confirm 50% decline underway

Everyone with exposure to stocks currently wants to know what will happen Monday and over the next week. In my opinion, now more than ever you need to take a longer term view and think about what might happen in coming months or longer. So I'll start with the long term charts and drill down. All charts include all sessions trade through to the end of the week.

Monthly chart shows the ASX 200 slicing through trend line support, and illustrates the blindingly apparent Elliott Wave count and implied trajectory going forward. Below the next lower trend line, for arguments sake below 5000, would in my books confirm the wave count, and favour a decline toward 2500. Let's call it 50%, from current levels. Further measured from the recent peak.



Weekly chart zooms in to show a couple of extra trend line supports recently shredded. A pretty good definition of a bear market is a market where there is no such thing as support. The trend is down. So, failing clear evidence of a bottom, expect this market to trend lower.



Daily chart last up. What's gonna happen Monday and over the next few days? Anything. I'd be surprised if any rallies weren't capped at or below that resistance line around 5450. Let's see.



S&P 500 last week's decline confirms turn lower from top of 25 year old trend channel

Everyone with exposure to stocks currently wants to know what will happen Monday and over the next week. In my opinion, now more than ever you need to take a longer term view and think about what might happen in coming months or longer. So I'll start with the long term charts and drill down. All charts include all sessions trade through to the end of the week.

Monthly chart shows the S&P 500 turning lower from the top of a 25 year old trend channel.



Zooming in on the monthly chart provides a clearer picture of the market making a bearish false upside break from the trend channel formed from 2009's low.



Weekly chart



Finally the daily chart, illustrating the recently departed trend channel, and possible short term support and resistance levels going forward. So what will happen tomorrow or next week? Anything. Probably a steep rally toward 2040, but it could begin from lower levels. Even a rally to 2080 would not surprise or upset the bearish case. Maybe it'll just go straight down. Let's see.


Hang Seng smashes lower through long term trend channel support, big decline ahead

This week saw the mainstream media run stories saying that the Hang Seng is now in a bear market, as it has declined beyond their arbitary 20% threshold from the recent peak. Thanks guys, really useful information, NOT! Regular readers of this site have been all over the decline from when it began back in early June.

Weekly chart shows the Hang Seng smashing lower through trend channel support. My long held Elliott Wave count calls for a decline below the 2008 low, more than 50% below current levels. All charts include all sessions trade through to the end of the week.



Weekly chart zoomed in a tad.



Daily chart last. I said mid-week that a break of those dual supports would result in a fast decline. Indeed. This market is yet another great example of chart patterns and trend lines being great guides to market behaviour and tools for managing risk.



EURO STOXX 50 shows dual bearish false breaks from long term trend channels, big decline beginning

Monthly chart shows the EURO STOXX 50 index making a bearish false upside break from the trend channel formed from 2009's low, signalling that the rally from 2009 is finished and a big decline has begun. Given the clear and weak upwards corrective nature of the rally from 2009, I think this market is headed a long way below that 2009 low. All charts include all sessions trade through to the end of the week.



Weekly chart shows the market also completed a bearish false upside break from the channel formed from 2012's low.



Daily chart zooms in on recent action. One of many recent examples of chart patterns and trend lines being a great guide to market action and tool for managing risk. The market needs to rally immediately on Monday or the trend line currently being tested will break and become resistance.



Nikkei turns lower at 25 year old resistance level, big decline beginning?

Monthly chart shows the Nikkei apparently turning lower at a 25 year old resistance level. Do lower timeframe charts shed more light on this possibility? All charts include all sessions trade through to the end of the week.



Weekly chart suggests that any move below this week's low will break dual trend line support and boost the view that the Nikkei has made a significant turn lower.



Daily chart shows the Nikkei trading at the lower end of a support zone, and adds to the case for last week's low being key. This market is not yet a shot duck but the bullet appears to be on target.



Gold rally from trend channel support suggests upside toward 1250+ in coming months

Weekly chart shows Gold rallying from trend channel support. Previous rallies from the nearby trend line have been good for 200, give or take. At this point, why expect anything different this time?



Daily chart shows that Gold has in the past week exceeded a solid past support/resistance zone, which should provide support going forward.



Silver rallying following retest of 2014 low

Weekly



Daily



AUD/USD declining toward test of 14 year old up trend line around 71.50?

Monthly chart suggests that AUD/USD could be declining to test trend line support around 71.50.



Weekly chart shows the market sliding down trend line support, and no evidence is visible that the decline is yet complete.



Daily chart shows the market stuck in a short term channel, with lines parallel to the previous channels. Again, no evidence of a bottom, so why not look for that a move toward 71.50?



AUD/JPY kisses goodbye to weekly chart trend line, poised for immediate strong decline

AUD/JPY looks poised for a strong decline, from a kiss goodbye to the trend line illustrated here on the weekly chart. The Elliott Wave count suggests a 3rd wave lower is just beginning, typically the strongest wave of an impulsive 5 wave move. I have labelled a possible future path purely to illustrate form, no attempt was made to accurately calculate levels. So let's see.



Daily chart zooms in to the wave count to show we should expect a 3rd of a 3rd decline. Buckle up! If we do see a 3rd of a 3rd, it will extend beyond the bottom of the chart by some distance.





EUR/USD rallying toward retest of multi year Head & Shoulders top neckline around 1.22?

Monthly chart shows that EUR/USD may be rallying toward a retest of the neckline of a multi year Head and Shoulders top. The key word is toward, as it may not make it all the way. There are multiple lines of resistance between current levels and the neckline. Some are illustrated on the subsequent daily chart. Let's see.



Weekly



Daily



USD/JPY testing key trend line supports, rally from 2011 low could be complete

Monthly chart shows that USD/JPY has recently been testing the price level where the bullish wedge of 2007 to 2011 began. Not coincidentally a common target for a break from a wedge is the starting point of that wedge, for both bullish and bearish wedges. To spell it out, with the target met, the rally from the 2011 low could be complete.



Weekly chart shows that the market is testing a key trend line support. A break would raise the odds for the rally from 2011 being complete.



Daily chart shows the market is testing support at previous highs. A break would be yet another piece of evidence that the rally from the 2011 is complete.